SAN DIEGO, March 14, 2017 /PRNewswire/ -- Arena
Pharmaceuticals, Inc. (Nasdaq: ARNA), a biopharmaceutical company
focused on developing novel, small molecule drugs across multiple
therapeutic areas, today provided a corporate update and reported
financial results for the fourth quarter and full-year ended
December 31, 2016.
"We are very pleased with our progress in 2016 as we have
positioned the Company to deliver results on multiple Phase 2
programs in 2017. In the last nine months since the
arrival of the new management team, we prioritized our Phase 2
programs; strengthened our board and team to support our strategy;
implemented cost reduction measures; renegotiated our agreement
with Eisai; and took a methodical approach to maximizing the value
of our assets," said Amit Munshi,
Arena's President and CEO.
As previously disclosed, in February
2017, Arena appointed Jayson
Dallas, M.D., Oliver Fetzer,
Ph.D., and Garry A. Neil, M.D. as
independent directors to the Company's Board of
Directors.
"This year we expect to report results from all three of our
proprietary Phase 2 programs, beginning with ralinepag in mid-year
for pulmonary arterial hypertension," Mr. Munshi stated. "For
etrasimod, we remain focused on maximizing the broad clinical
utility of this compound in a time and cost effective manner. We
are pleased to have initiated Phase 2 trials in both dermatologic
extraintestinal manifestations in inflammatory bowel disease
patients and pyoderma gangrenosum. We also plan to initiate a study
in primary biliary cholangitis this year. Additionally, we have
made important adjustments to the Phase 2 ulcerative colitis trial
to ensure a robust data readout by year-end 2017."
Pipeline Update
Ralinepag – oral, selective IP receptor agonist targeting the
prostacyclin pathway for the potential treatment of pulmonary
arterial hypertension (PAH)
- Phase 2 trial in PAH
- Enrollment of the Phase 2 trial in pulmonary arterial
hypertension was completed in December
2016
- Data readout expected in mid-year 2017
- Phase 1 pharmacokinetic and pharmacodynamic trial comparing
current twice-daily formulation with a new once-daily formulation
in healthy volunteers
- Trial initiated in March
2017
- Data readout expected mid-year 2017
Etrasimod – orally available next generation
sphingosine-1-phosphate (S1P) receptor modulator for the potential
treatment of a number of autoimmune diseases
- Phase 2 trial in ulcerative colitis (UC)
- Implementing protocol updates to the OASIS program that
maintain study conduct, integrity, and patient safety; further the
probability of a successful trial; and facilitate expected data
readout in 2017
- Phase 2 trial in dermatological extraintestinal manifestations
(EIM) in patients with inflammatory bowel disease (IBD)
- Trial initiated in March
2017
- Phase 2 trial in pyoderma gangrenosum (PG)
- Trial initiated in March
2017
- Phase 2 trial in primary biliary cholangitis (PBC)
- Intend to initiate clinical study in 2017
APD371 – orally available full agonist of the cannabinoid-2,
receptor for the potential treatment of visceral pain, specifically
pain associated with Crohn's disease
- Phase 2 trial in pain associated with Crohn's disease
- Currently incorporating feedback related to study design and
conduct into the clinical protocol design and selecting sites
Collaborations Update
- Axovant
- On February 13, 2017, Axovant
announced preliminary results from the planned interim analysis of
the first 11 patients to complete its Phase 2 study of nelotanserin
in Lewy body dementia patients. Axovant has stated plans to
initiate a Phase 3 in the second half of 2017
- Eisai
- On December 28, 2016, Arena and
Eisai Co., Ltd. and Eisai Inc. (collectively, "Eisai")
amended and replaced the BELVIQ® (lorcaserin HCl) marketing
and supply agreement. Under the revised agreements, Eisai acquired
global commercialization rights to BELVIQ and is responsible for
all lorcaserin development expenses going forward. The financial
terms of the revised agreement are expected to provide Arena with
$23 million of cash payments,
including $10 million received in the
fourth quarter, and over $80 million
of potential cost relief on lorcaserin development obligations in
the next three years. In addition, Arena will continue to be
eligible to receive royalty payments on net sales of BELVIQ and
participate in the upside potential of lorcaserin from additional
geographies and clinical trials such as the ongoing cardiovascular
outcomes trial, CAMELLIA
- As a result of the Eisai transaction, a significant amount of
non-cash items were recognized in the 2016 financial
statements
Financial Update
Fourth Quarter 2016 Financial Results
- Revenues totaled $85.4 million,
including $15.2 million in net
product sales of BELVIQ, $1.3 million
in milestone payments earned from Eisai and Ildong for BELVIQ, and
$66.1 million of revenue associated
with upfront BELVIQ payments
- Research and development expenses totaled $11.9 million
- General and administrative expenses totaled $7.3 million
- Impairment of assets totaled $21.8
million
- Net income was $38.3 million or
$0.16 per share
Full Year 2016 Financial Results
- Revenues totaled $124.0 million,
including $26.3 million in net
product sales of BELVIQ, $12.3
million of milestone payments earned from Eisai and Ildong
for BELVIQ, and $72.1 million of
revenue associated with upfront BELVIQ payments
- Research and development expenses totaled $66.4 million
- General and administrative expenses totaled $31.2 million
- Restructuring charges totaled $6.3
million
- Impairment of assets totaled $21.8
million
- Net loss was $22.9 million, or
$0.09 per share
At December 31, 2016, cash and
cash equivalents totaled $90.7
million and approximately 243 million shares of Arena common
stock were outstanding.
2017 Financial Guidance
The Company expects the full
year 2017 net cash used in operating and investing activities to be
$80 to $100 million, assuming no
additional partnerships and no adjustment to our development
plans.
Conference Call & Webcast Information
The Company
will host a conference call and live webcast with the investment
community today, Tuesday, March 14,
2017, at 4:30 p.m. ET to
discuss the financial results and provide a corporate update.
When: March 14, 2017, 4:30 p.m. ET
Dial-in: (877) 643-7155 (United
States) or (914) 495-8552 (International)
Conference ID: 80816089
Please join the conference call at least 10 minutes early to
register.
You can access the live webcast under the investor relations
section of Arena's website at: www.arenapharm.com. A
replay of the conference call will be archived under the investor
relations section of Arena's website for 30 days shortly after the
call.
About Arena Pharmaceuticals
Arena Pharmaceuticals is a
biopharmaceutical company focused on developing novel, small
molecule drugs with optimized receptor pharmacology designed to
deliver broad clinical utility across multiple therapeutic areas.
Our proprietary pipeline includes potentially first- or
best-in-class programs for which we own global commercial
rights. Our three most advanced investigational clinical
programs are ralinepag (APD811) in Phase 2 evaluation for pulmonary
arterial hypertension (PAH), etrasimod (APD334) in Phase 2
evaluation for multiple autoimmune indications, and APD371 entering
Phase 2 evaluation for the treatment of pain associated with
Crohn's disease. In addition, Arena has collaborations with the
following pharmaceutical companies: Eisai Co., Ltd. and Eisai Inc.
(commercial stage), Axovant Sciences (Phase 2 candidate), and
Boehringer Ingelheim International GmbH (preclinical
candidate).
Forward-Looking Statements
Certain statements in this
press release are forward-looking statements that involve a number
of risks and uncertainties. Such forward-looking statements include
statements about expected results, data readouts and timing
relating to ongoing clinical trials; expected payments and
potential cost relief under the revised agreements with Eisai;
financial guidance for 2017; and Arena's focus, goals, strategy and
clinical programs. For such statements, Arena claims the protection
of the Private Securities Litigation Reform Act of 1995. Actual
events or results may differ materially from Arena's expectations.
Factors that could cause actual results to differ materially from
the forward-looking statements include, but are not limited to, the
following: the risk that we may need additional funds to
advance all of our programs, and you and others may not agree with
the manner we allocate our resources; risks related to developing
and commercializing drugs; cash and revenues generated from BELVIQ
and our revised agreements with Eisai; the risk that Arena's
revenues are based in part on estimates, judgment and accounting
policies, and incorrect estimates or disagreement regarding
estimates or accounting policies may result in changes to Arena's
guidance or previously reported results; the timing and outcome of
research, development and regulatory review is uncertain, and our
drug candidates may not advance in development or be approved for
marketing; government and third-party payor actions, including
relating to reimbursement and pricing; risks related to relying on
collaborative arrangements; the entry into or modification or
termination of collaborative arrangements; unexpected or
unfavorable new data; nonclinical and clinical data is voluminous
and detailed, and regulatory agencies may interpret or weigh the
importance of data differently and reach different conclusions than
Arena or others, request additional information, have additional
recommendations or change their guidance or requirements before or
after approval; Arena's and third parties' intellectual property
rights; results of clinical trials and other studies are subject to
different interpretations and may not be predictive of future
results; clinical trials and other studies may not proceed at the
time or in the manner expected or at all; and satisfactory
resolution of litigation or other disagreements with others.
Additional factors that could cause actual results to differ
materially from those stated or implied by Arena's forward-looking
statements are disclosed in Arena's filings with the Securities and
Exchange Commission. These forward-looking statements represent
Arena's judgment as of the time of this release. Arena disclaims
any intent or obligation to update these forward-looking
statements, other than as may be required under applicable law.
Contact:
Kevin R. Lind,
Chief Financial Officer
klind@arenapharm.com
858.210.3636
(Tables Follow)
Arena
Pharmaceuticals, Inc.
Condensed
Consolidated Statements of Operations
(In thousands, except
per share amounts)
|
|
|
|
|
|
Three months
ended
|
|
Year ended
|
|
December
31,
|
|
December
31,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
(unaudited)
|
|
|
Revenues
|
|
|
|
|
|
|
|
Net product
sales
|
$
15,245
|
|
$
3,939
|
|
$
26,349
|
|
$
19,726
|
Other Eisai
collaboration revenue
|
61,546
|
|
2,091
|
|
79,701
|
|
9,505
|
Other collaboration
revenue
|
7,730
|
|
670
|
|
13,796
|
|
4,845
|
Toll
manufacturing
|
853
|
|
1,051
|
|
4,129
|
|
4,250
|
Total
revenues
|
85,374
|
|
7,751
|
|
123,975
|
|
38,326
|
|
|
|
|
|
|
|
|
Operating Costs
& Expenses
|
|
|
|
|
|
|
|
Cost of product
sales
|
5,136
|
|
2,461
|
|
9,297
|
|
8,590
|
Cost of toll
manufacturing
|
1,168
|
|
787
|
|
6,044
|
|
4,585
|
Research &
development
|
11,911
|
|
20,170
|
|
66,425
|
|
88,411
|
General &
administrative
|
7,264
|
|
9,655
|
|
31,243
|
|
35,966
|
Restructuring
charges
|
0
|
|
3,972
|
|
6,346
|
|
3,972
|
Impairment of
long-living assets
|
21,766
|
|
0
|
|
21,766
|
|
0
|
Total
operating costs & expenses
|
47,245
|
|
37,045
|
|
141,121
|
|
141,524
|
|
|
|
|
|
|
|
|
Interest &
Other Income (Expense)
|
|
|
|
|
|
|
|
Interest
income
|
43
|
|
53
|
|
290
|
|
158
|
Interest
expense
|
(1,605)
|
|
(1,695)
|
|
(6,512)
|
|
(6,828)
|
Gain from valuation
of derivative liabilities
|
0
|
|
0
|
|
0
|
|
474
|
Other
|
1,747
|
|
477
|
|
472
|
|
1,415
|
Total interest
& other income (expense), net
|
185
|
|
(1,165)
|
|
(5,750)
|
|
(4,781)
|
Net income
(loss)
|
38,314
|
|
(30,459)
|
|
(22,896)
|
|
(107,979)
|
Less net loss
attributable to noncontrolling interest in consolidated variable
interest entity
|
258
|
|
0
|
|
380
|
|
0
|
Net income (loss)
attributable to stockholders of Arena
|
$
38,572
|
|
$
(30,459)
|
|
$
(22,516)
|
|
$
(107,979)
|
|
|
|
|
|
|
|
|
Net income(loss)
attributable to stockholders of Arena per share:
|
|
|
|
|
|
|
|
Basic
|
$
0.16
|
|
$
(0.13)
|
|
$
(0.09)
|
|
$
(0.45)
|
Diluted
|
$
0.16
|
|
$
(0.13)
|
|
$
(0.09)
|
|
$
(0.45)
|
|
|
|
|
|
|
|
|
Shares used in
calculating net loss attributable to stockholders of Arena per
share:
|
|
|
|
|
|
|
|
Basic
|
243,325
|
|
242,566
|
|
243,133
|
|
240,671
|
Diluted
|
243,495
|
|
242,566
|
|
243,133
|
|
240,671
|
Arena
Pharmaceuticals, Inc.
|
Condensed
Consolidated Balance Sheet Data
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
December 31,
2016
|
|
December 31,
2015
|
|
1
|
|
1
|
Assets
|
|
|
|
Cash &
cash equivalents
|
$ 90,712
|
|
$ 156,184
|
Accounts
receivable
|
20,162
|
|
4,934
|
Inventory
|
6,708
|
|
9,502
|
Prepaid
expenses & other current assets
|
2,307
|
|
4,218
|
Land, property
& equipment, net
|
43,828
|
|
71,828
|
Intangibles
& other non-current assets
|
5,293
|
|
10,126
|
Total
assets
|
$ 169,010
|
|
$ 256,792
|
|
|
|
|
Liabilities &
Equity
|
|
|
|
Accounts
payable & accrued liabilities
|
$
25,073
|
|
$
25,493
|
Total deferred
revenues
|
37,455
|
|
109,042
|
Total lease
financing obligations & other long-term liabilities
|
66,087
|
|
68,715
|
Total
equity
|
40,395
|
|
53,542
|
Total
liabilities & equity
|
$ 169,010
|
|
$ 256,792
|
|
|
1 The Condensed Consolidated Balance Sheet Data has
been derived from the audited financial statements as of that
date.
|
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SOURCE Arena Pharmaceuticals, Inc.